A game-theoretic approach to determining the preferential berthing charges of ocean carriers

In response to uncertain global economy, many port authorities postponed their investment plans for improving or expanding the port infrastructure. As such, the utilisation of the existing port facilities and the assurance of needed port finances have become the crucial issues for port survival and competitiveness. To address those issues, many ports attempted to formulate port pricing strategy in such a way that it attracts more carriers/shippers, while recovering costs associated with port investment, operation and maintenance. One critical element of port pricing includes a berthing charge. Considering a strategic significance of berthing charge to port competitiveness, this paper develops a mathematical model based on game theory that helps port authorities determine the optimal berthing charge. To validate the rigour and usefulness of the proposed game‐theoretic model, we applied it to solve actual berthing charge problems encountered by one of the leading container ports in Korea.